U.S. President-elect Donald Trump has it in for Panama—he has called on Panama to reduce fees for the Panama Canal or return it to U.S. control, accusing the Central American nation of charging “exorbitant prices” to American shipping and naval vessels.
“The fees being charged by Panama are ridiculous, highly unfair,” Trump told a crowd of supporters in Arizona on Dec. 22.
“This complete rip-off of our country will immediately stop,” Trump added, referring to when he takes office next month.
His comments earned him a reprimand from Panamanian President, José Raúl Mulino, who said “every square metre” of the canal and surrounding area belonged to his country.
What is the Panama Canal
The Panama Canal, completed in 1914, is a monumental engineering project connecting the Atlantic and Pacific Oceans. Initially envisioned by the French under Ferdinand de Lesseps in the 1880s, the construction of the canal was then halted due to financial and technical challenges along with disease.
The United States took over in 1904, completing the canal after overcoming widespread diseases like malaria and yellow fever, and redesigned the project. The canal shortened maritime travel by about 8,000 miles, significantly boosting global trade. The U.S. controlled the canal until 1999, when it was handed over to Panama following the Torrijos-Carter Treaties, marking a significant shift in the region’s geopolitics.
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Present situation with Trump
Speaking to supporters of Turning Point USA—a conservative activist group that provided significant support to his 2024 election campaign—Trump said on Sunday, “if shipping rates are not lowered, we will demand that the Panama Canal be returned to us, in full, quickly and without question.”
Trump’s rhetoric and posturing may result in rising tensions between the two countries. It is too soon to tell if Trump indeed plans on annexing the Panama Canal or if it was just bluster for his supporters.
While Mulino stood his ground and said that Panama’s sovereignty and independence were non-negotiable.
Alternative routes for the Panama Canal
Countries seeking alternatives to the Panama Canal for shipping goods have several options, depending on their location, destination, and the type of cargo being transported.
Here’s a list of potential alternative routes and channels:
1. Suez Canal (Egypt)
Route: Connects the Mediterranean Sea to the Red Sea, facilitating direct passage between Europe and Asia (without the need to navigate around Africa).
Alternatives: Particularly useful for ships moving between Europe and the Middle East, India, and East Asia
Considerations: Can handle large vessels (though smaller than the largest Panamax and New Panamax ships), and it is often used for Europe-Asia trade.
2. Strait of Magellan (Southern Chile)
Route: A natural sea passage at the southern tip of South America that connects the Atlantic and Pacific Oceans.
Alternatives: Useful for ships moving between the Atlantic and Pacific Oceans, especially for vessels too large for the Panama Canal or when geopolitical issues block access to the Canal.
Considerations: Longer and more hazardous than the Panama Canal, with harsh weather conditions and strong currents. It is less commonly used due to the challenging navigation and longer time involved.
3. Bering Strait (Russia/Alaska)
Route: A proposed Arctic route that connects the Pacific Ocean to the Arctic Ocean, passing between Russia and Alaska.
Alternatives: Ships can travel from the Pacific to the Arctic and into the Atlantic through the northern sea routes.
Considerations: The Arctic route is still under development and is generally only usable in the summer months due to ice. Climate change has made this route more viable, but it still faces significant infrastructure challenges and geopolitical tensions.
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4. Northern Sea Route (Russia)
Route: A navigational route along the Russian Arctic coast, connecting the Atlantic and Pacific Oceans.
Alternatives: Ships from Europe can navigate through the Barents Sea and across the Arctic Ocean to reach East Asia without going through the Suez Canal or Panama Canal.
Considerations: Similar to the Bering Strait, the Northern Sea Route is mostly viable in summer and requires specialized ships for ice navigation. Its use is growing due to climate change, but it remains challenging.
5. Cape of Good Hope (Southern Africa)
Route: A traditional route that circumnavigates the southern tip of Africa, connecting the Atlantic and Indian Oceans.
Alternatives: Ships can travel around the Cape of Good Hope to avoid the Panama Canal, especially if they are traveling between Europe and Asia.
Considerations: This route is significantly longer than the Panama Canal and can be very costly in terms of fuel and time. However, it is an established alternative, particularly when the Suez Canal is unavailable or congested.
6. Dardanelles and Bosphorus Strait (Turkey)
Route: A pair of straits that connect the Aegean Sea to the Black Sea, allowing access to Russia, Ukraine, and other nations in the region.
Alternatives: These straits are more relevant for shipping goods to and from the Black Sea region and beyond (for example, to Eastern Europe and Central Asia).
Considerations: These straits are navigable for smaller ships, but they are not suitable for large ocean-going vessels. There are restrictions on the size of vessels that can pass through, making them less practical for large-scale global trade.
7. Trans-Siberian Railway (Russia)
Route: While not a sea route, the Trans-Siberian Railway offers an overland alternative for cargo transportation between Europe and Asia.
Alternatives: It can be used for containerized shipments, particularly for high-value or time-sensitive goods.
Considerations: This route can be fast for certain types of cargo but requires careful coordination and can be expensive. It also involves land transportation, which is not ideal for bulk commodities or large shipments.
8. New Silk Road (China-Europe Rail Corridor)
Route: An overland route of rail connections spanning from China to Europe, passing through Central Asia, Russia, and parts of the Middle East.
Alternatives: It provides an alternative for rail freight, especially for goods like electronics, machinery, and industrial products.
Considerations: Though faster than sea transport, it is often less cost-effective for bulkier, low-value cargo. It’s also subject to geopolitical risk and infrastructure constraints in some regions.
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9. Cape Horn (Chile)
Route: The southernmost point of South America, located below the Strait of Magellan, offers a route from the Atlantic to the Pacific.
Alternatives: It is a viable option for very large ships that can’t pass through the Panama Canal.
Considerations: Like the Strait of Magellan, this route is more hazardous, with rough seas and unpredictable weather.
10. The Arctic (Polar Shipping Routes)
Route: Emerging shipping routes across the Arctic Ocean that could connect Europe, North America, and Asia more directly, especially as ice melts due to global warming.
Alternatives: Offers a potential shortcut between Europe and Asia, with some routes possibly bypassing the need for the Panama Canal or Suez Canal.
Considerations: Currently, the Arctic shipping routes are still in the experimental stage and are primarily available only during summer months. Environmental and geopolitical risks are major factors to consider.
Summary of key considerations:
Suez Canal: The most common alternative, especially for Europe-Asia trade.
Strait of Magellan and Cape Horn: Viable for large vessels but far longer and more dangerous.
Arctic routes: Emerging, but limited by ice and infrastructure.
Overland routes: The Trans-Siberian Railway and New Silk Road offer alternatives for containerized cargo but are less suited for bulk goods.
Each alternative has trade-offs in terms of time, cost, weather conditions, and infrastructure availability, and the decision to use them depends on the type of cargo, the cost of transportation, and the geopolitical context at the time.
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